By Dana Villasenor
The international Wellbeing Economy Alliance defines a “Wellbeing Economy” as an economy that focuses “on meeting fundamental needs and, by getting things right the first time, avoids the huge expenditures we are currently incurring trying and failing to fix the massive environmental and social harms our current system is causing.”
Let’s have a look at three potential wellbeing economies: In their article The wellbeing economy: Possibilities and limits in bringing sufficiency from the margins into the mainstream, Anders Hayden and Clay Dasilva, two researchers at Dalhousie University and University of Waterloo in Canada, look at different approaches to a Wellbeing Economy from three countries leading in sustainability. There is a need for change in the way we approach economic prosperity in the light of environmental struggles from a pro-growth environmental perspective to a post-growth, sufficiency oriented approach. “Pro-growth” means that the focus of a governmental system should be economic growth, while “post-growth” refers to defining national success by focusing on different aspects of society (i.e. racial equality, safety, etc. and as well the GDP could be a part).
The Wellbeing Economy Governments (WEGo), comprising New Zealand, Scotland, Iceland, Finland and Wales are working to move away from the dependence of economic growth and transition to a post-growth perspective using the UN Sustainable Development Goals (SDGs) as a guideline on defining and measuring prosperity. There are 17 SDGs which were adopted by all United Nations member states in 2015. The goalie to meet all these goals by 2030. This plan is outlined in the 2030 Agenda for Sustainable Development. One of the 17 goals (SDG8) deals with decent work and economic growth.
Pro-growth arguments focus on how economic growth that moves in an environmental direction can create new jobs in developing eco-friendly sectors and how new technologies can be used to combat environmental impacts. While the expansion of eco-friendly sectors of the economy is not against post-growth, the focus shifts from economic growth to sustainability and environmentally conscious policy. There are different ways to approach this. One of them is the “Wellbeing Economy.” According to the wellbeing economy, sustainability and can be understood as “consuming enough to live a good life but not at the expense of the future of the environment, other individuals, or subsequent generations.”
The Wellbeing Economy’s humanitarian goals are to create an economic system that fosters dignity, connection, nature, fairness and participation. These five core needs for human and environmental wellbeing would be achieved through policy changes such as countering structural discrimination, and dispersing economic power.
The Wellbeing Economy is making its way into policy making with encouragement by the Organisation for Economic Cooperation and Development (OECD) and the European Union. The OECD is an organisation that helps multiple countries with the development of policies addressing socio-economic issues. The European Union is a conglomeration of European countries which influence each other’s policy. The more countries/organisations that accept and push for a Wellbeing Economy, the more well-rounded the definition and approach to prosperity becomes.
Hayden and Dasilva look at how three countries from the WEGOs measure progress without resorting to the growth of the gross domestic product.
Aotearoa New Zealand has been critiquing GDP as an indicator of prosperity since before the turn of the century. This comes at no surprise since the nation has a history of progressive reform leading in areas such as women’s rights and social equity, although also a legacy of socio-economic marginalization of Māori and Pasifika peoples. After the macroeconomic and political crisis of the mid 1980s, New Zealand adopted neoliberal reforms and austerity. Now, the nation is emerging as a leader in the Wellbeing Economy movement.
New Zealand’s strategy to measure prosperity “beyond GDP” started by developing the Living Standard’s Framework (LSF) which measures “intergenerational wellbeing.” Intergroup wellbeing is measured by taking into account civic engagement and governance, cultural identity, environment, health, housing, income and consumption, jobs and earnings, knowledge and skills, safety, social connections, subjective wellbeing, and time use; while future wellbeing is measured using four forms of capital: natural, human, social, financial, and physical.
New Zealand uses these progressive measures in policymaking by creating the five priorities of the annual “wellbeing budgets” based on LSFs and other expert input. This way, public agencies have to prove their expenditures will lead to intergenerational wellbeing. The first wellbeing budget in 2019 highlighted mental health, child wellbeing, supporting indigenous (Māori and Pasifika) people, supporting a thriving nation in the digital age through innovation, and the transition to a sustainable, low-emissions economy.
While NZ has seen some of the biggest investments in future wellbeing indicators, these efforts are still not exhaustive enough. The 2022 budget was criticized by the Country Lead for the Wellbeing Economy Alliance of NZ as “contain[ing] many good measures […] However [continuing] the incremental, slow approach to change that won’t substantially alter persistent poverty, wealth inequality or the biodiversity and climate crises.” Furthermore, criticshave pointed out that the government has focused on paying for damage caused by the system, rather than addressing the system itself.
Scotland’s approach to a WE economy was prompted by concentrations of poor health outcomes as well as poverty and deprivation. In 2018 the National Performance Framework was reformed to make “increased wellbeing, and sustainable economic growth” a national focus.
The Framework identifies 11 priority national outcomes — related to children and young people, communities, culture, economy, education, environment, fair work and business, health, human rights, international contributions, and poverty — behind which are 81 indicators, many of which are linked to the UN Sustainable Development Goals.
Scotland’s goals can be understood in Delivering Economic Prosperity: Scotland’s National Strategy for Economic Transformation which mentions that the goal of a WE is “a society that is thriving across economic, social and environmental dimensions, and that delivers prosperity for all Scotland’s people and places […] while respecting environmental limits, embodied by our climate and nature targets”. The government based their Wellbeing Economy on the principles of prosperity, equality, sustainability, and resilience.
Scotland includes wellbeing as a core objective but does not make it the ultimate goal as other formulations of WE. It does not move away from wanting to be recognized for an economic increase in market, entrepreneurship, and businesses. Critics believe this attitude of hoping GDP growth will trickle down causes governments to focus on the economic and exploitative potential of green energies but to not effectively transition to an ecologic model by ignoring less profitable changes. Furthermore, it keeps the efforts focused on fixing symptoms of systematic failure instead of fixing the system itself as mentioned with NZ.
Iceland also has a history of progressive policy. In the 2008 financial crisis, Iceland was the only country to prosecute bankers for their role in it, and while there were spending cuts which negatively affected the “big banks,” social benefits were protected. The nation ranks number 1 globally in Gender Equality according to the Global Gender Gap Report by the World Economic Forum and its current prime minister is the head of the Left-Green Movement. Furthermore, Iceland has been experimenting, along with other WEGo states, with shorter work-time reduction leading to more permanent work-time reduction which increases quality of life in workers.
In 2018 the Prime Minister’s Committee on Indicators of Wellbeing made a survey where it found that the top four indicators for a quality of life most important to Icelanders were health, relationships, housing, and making a living. In 2019, a framework of 39 indicators was drafted from the 2018 survey. These indicators measured social, economic, and environmental factors with GDP and economic growth among them. In the same year, the Icelandic government used six wellbeing priorities (mental health, secure housing, better work-life balance, zero carbon emissions, innovation growth, and better communication with the public) based on the 2018 survey and other governmental goals to make the annual budget and the country’s 5-year fiscal strategy.
Iceland has also pointed out some environmental goals such as reducing greenhouse gasses 55% below 2005 levels by 2030, and making iceland the first state to not be dependent on fossil fuels by 2040 by achieving carbon neutrality and full energy conversion.
While these three countries have a commitment to sufficiency, there is still work to be done with moving away from GDP growth as the primary goal in the economy. There has been a rise in monetary allocations on mental health to increase quality of life and other positive effects from countries adopting wellbeing economies. But according to Hayden and Dasilva, there has to be a movement away from GDP growth dependency to break the glass ceiling of sustainable development.
Anders Hayden and Clay Dasilva, “The wellbeing economy: Possibilities and limits in bringing sufficiency from the margins into the mainstream”, Front. Sustain., 10 October 2022, Sec. Sustainable Consumption, https://doi.org/10.3389/frsus.2022.966876